The Securities and Exchange Commission's application for a preliminary injunction and other relief against Martin A. Armstrong was granted yesterday by the United States District Court for the Southern District of New York.

In its complaint, the Commission alleges that Armstrong and two companies he controls, Princeton Economics International, Ltd. and Princeton Global Management, Ltd., defrauded Japanese investors out of nearly $1 billion. The Commission alleges that defendants have raised billions of dollars since 1996 by fraudulently offering and selling promissory notes to Japanese corporations. In offering and selling those notes, defendants represented to investors that the proceeds from the note sales would be deposited in segregated accounts and would be conservatively invested. Instead, defendants lost hundreds of millions of dollars through risky currency and commodities trading, commingled investor funds, used investor funds to conceal trading losses, and arranged for the mailing of letters that materially overstate the net asset value of the accounts underlying investors' notes. As a result of defendants' conduct, investor losses approach $1 billion. The Commission alleged that, by engaging in the foregoing conduct, the defendants committed securities fraud in violation of Section 17(a) of the Securities Act of 1933, and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 (the "antifraud provisions").

The Commission sought a temporary restraining order, a freeze of defendants' assets, and the appointment of a receiver for the corporate defendants -- relief which was granted by the court on September 13, 1999 -- as well as orders preliminarily and permanently enjoining the defendants from future violations of the federal securities laws, disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties. Yesterday, the court approved the Commission's application for a preliminary injunction and other relief, including the continuation of the asset freeze and the temporary receivership during the pendency of the litigation. The court indicated that it will issue an opinion and order accordingly and ordered that the order entered on September 13, 1999, will remain in place until the preliminary injunction order is executed. In addition, Princeton Economics International, Ltd. and Princeton Global Management, Ltd., the two corporate defendants, have consented, without admitting or denying the Commission's allegations, to be permanently enjoined from further violations of the antifraud provisions.